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oi-Oneindia Staff
GST
Council
Directs
GoM
to
Re-Examine
Its
Report
India’s
GST
Council
did
not
take
a
decision
on
what
recommendations
to
make
for
changes
to
the
indirect
tax
levy
on
online
gaming,
casinos,
and
horse
racing
at
its
47th
meeting
held
on
June
28
and
29
in
Chandigarh.
Instead,
the
Group
of
Ministers
(GoM)
tasked
to
look
at
the
issue
was
directed
to
re-examine
its
stance
based
on
further
input
from
state
governments
and
submit
a
new
report
by
July
15.
The
eight-member
GoM
led
by
Meghalaya
Chief
Minister
Conrad
K.
Sangma
was
formed
in
May
2021
and
submitted
its
full
report
in
May
this
year.
Reportedly,
the
GoM
has
proposed
Goods
and
Services
Tax
to
be
applied
on
the
full
Gross
Gaming
Value
(GGV),
or
the
whole
entry
ticked
or
bet
amount,
instead
of
levying
only
the
Gross
Gaming
Revenue
(GGR),
or
the
trade
margin
kept
by
gaming
operators
for
their
services.
The
GoM’s
suggestion
also
includes
a
hike
of
the
applicable
GST
rate
from
18
to
28
percent.
According
to
the
proposal,
all
online
gaming
varieties,
casinos
and
horse
racing
betting
would
be
taxed
uniformly.
The
Three
Major
Gaming
Industry
Bodies
Express
Their
Concerns
A
statement
by
the
three
major
gaming
industry
bodies
in
India
–
the
All
India
Gaming
Federation
(AIGF),
the
E-Gaming
Federation
(EGF)
and
the
Federation
of
Indian
Fantasy
Sports
(FIFS),
who
collectively
represent
an
excess
of
90
percent
of
the
country’s
online
skill
gaming
industry,
expressed
a
serious
concern
that
an
implementation
of
the
so
proposed
GST
regime
would
be
“catastrophic”
for
the
sector.
The
GoM’s
current
GST
levy
proposal
is
not
only
a
“conflict
with
international
best
practices
but
also
violative
of
the
principles
of
GST,”
the
statement
said.
According
to
the
three
federations,
an
eventual
GST
levy
at
the
highest
rate
slab
of
28
percent
over
the
whole
GGV
will
force
gaming
operators
to
drastically
lower
the
prize
pools
they
offer
to
gamers.
Such
a
development
will
drive
loyal
users
away
from
their
platforms
and
towards
offshore
or
black
market
websites
that
promise
higher
gains.
As
has
been
shown
by
global
studies,
levying
tax
on
the
prize
pools
instead
of
charging
only
the
GGR
leads
to
reduction
of
tax
collection
and
flourishing
of
shady
or
illegal
platforms
at
the
expense
of
legitimate
gaming
operators.
In
this
way,
the
implementation
of
the
proposal
by
Conrad
Sangma’s
GoM
in
its
current
form
has
the
potential
to
inflict
a
permanent
and
irreparable
harm
to
the
country’s
online
gaming
industry
by
incentivising
users
to
play
illegally
without
any
tax
being
collected.
Gaming
Regulation
May
Prove
an
Empty
Move
Several
developments
of
the
last
few
months
show
a
new
and
growing
interest
in
India’s
central
and
state
political
circles
towards
regulating
the
online
gaming
industry
in
view
of
ensuring
player
protection
and
a
safe
gaming
environment
for
desi
gamers,
as
well
as
raising
tax
collection.
However,
obliterating
the
country’s
gaming
industry
with
overtaxation
may
easily
render
any
regulation
over
it
a
pointless
and
empty
move.
“At
the
end
of
the
day,
regulations
are
there
to
protect
people,
and
it’s
proven
that
countries
that
regulate
gambling
aren’t
only
able
to
ensure
that
players
are
using
a
safe
product
but
are
also
ensuring
that
licensed
operators
are
contributing
to
the
welfare
of
the
country
in
the
means
of
tax
and
licensing
fees,”
as
stated
by
Felicia
Wijkander,
Chief
Editor
at
SevenJackpots,
one
of
India’s
largest
casino
comparison
platforms.
Thus,
the
introduction
of
the
Online
Gaming
(Regulation)
Bill,
2022
in
the
Lok
Sabha,
the
formation
of
an
inter-ministerial
panel
to
study
global
best
practices,
consult
experts
and
propose
a
legal
framework
for
gaming
regulation,
the
setting
up
of
the
Animation,
Visual
Effects,
Gaming
and
Comics
(AVGC)
Promotion
Task
Force,
and
the
proposal
of
the
Rajasthan
Virtual
Online
Sports
(Regulation)
Bill,
2022,
are
all
welcomed
developments
as
long
as
India’s
gaming
industry
is
able
to
survive
and
thrive.
According
to
Union
Prime
Minister
Narendra
Modi,
“the
gaming
market
is
huge
internationally
and
the
number
of
youth
connected
to
this
market
is
increasing”
globally.
The
Indian
part
of
the
market
is
expected
to
generate
$1.54
billion
in
revenues
in
2022
and
to
grow
further
to
$5
billion
by
2025
creating
two
lakhs
of
new
job
opportunities.
The
number
of
desi
gamers
has
grown
by
8
percent
from
36
crore
in
2020
to
39
crore
in
2021.
It
would
be
a
pity
if
India
fails
to
support
this
industry
with
sensible
tax
and
legal
frameworks
and
devastates
its
potential
with
unreasonably
high
levies,
pushing
the
tens
of
crores
of
gamers
into
the
black
market
instead
of
ensuring
a
safe
gaming
environment
for
them.